9911796707
TMI Blog2024 (2) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... in the hands of the assessee society? 2. "Whether on the facts and circumstances of the case and in Law, the Hon'ble ITAT is justified in holding that the amount received on account of corpus fund is taxable in the year of receipt even when the assessee is following mercantile system of accounting? 3. "Whether on the facts and circumstances of the case and in Law, the Hon'ble ITAT is justified in holding that the amount paid by the developer to MHADA on behalf of the assessee would not be treated as income of the assessee?" 3. Assessee is registered under the Maharashtra Co-operative Societies Act, 1960. Assessee owned 12 three storied buildings comprising of eight residential flats in each building on a plot of land measuring around 9973.19 sq. mtrs. The plot of land on which the said buildings were constructed was held by assessee as a lessee under a long-term lease of 90 years beginning from 16th May 1977. Apart from that, Maharashtra Housing and Development Authority ("MHADA"), in 1977 had altered and sold to assessee additional Floor Space Index ("FSI") of 2880 sq. mtrs. in respect of the entire plot. 4. In 2010, assessee along with 96 of its members decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aj Ratan Palace Co-operative Housing Society(supra), wherein the Tribunal had dealt with the similar issue. It that matter the society consisted of 51 members and was owner of certain property. It entered into an agreement with a developer for development of said property. The Tribunal recorded the following facts: "The assessee was a registered housing society having 51 members and duly elected managing committee. It was the owner of a property admeasuring 3316 sq.meters or thereabouts together with 'R' building. The society invited offers from builders for redevelopment of its property by construction of a new multi-storey building behind the 'R' building, by means of T.D.R. from elsewhere and by the consumption of available F.S.I. of the said property, after demolishing the existing bungalow. In pursuance of the above 'N' submitted tender for development of society's said property. The assessee society vide agreement dated 18.05.1996 agreed to grant to the developers permission leave and licence to enter upon the society's property and with the right to demolish the said bungalow and construct a new multi-storey R.C.C. building, on the terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under clause 13 of the agreement dated 18-5-1996 was paid to the individual members of the society under 51 different agreements. Thus, it was clear that the assessee did not part with any rights in property and did not receive any consideration except a sum of Rs. 2,51,000. In such circumstances, one failed to see as to how there could be any incidence of taxation in the hands of the assessee. Besides, the order of the Assessing Officer was vague. It was not clear as to whether the sum in question was brought to tax as capital gain in the hands of the assessee or as income under section 2(24). Neither of the above provisions could be pressed into service for bringing the sum in question to tax in hands of the assessee. As already seen that there was no receipt by the assessee except a sum of Rs. 2,51,000. The sum so received was for merely granting consent to consume TDR purchased by the developer from a 3rd party. The society continued to be the owner of the land and no change in ownership of land had taken place. Mere grant of consent would not amount to transfer of land/or any rights therein. It was also seen that the some of the individual members had offered the receipts fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. As per the scheme of the Act, income received by any person or income accrued to him has to be taxed. In the case under consideration, income was received by the members and they had be offered the same for taxation. 5. We also hold that Society was only the lessee and what was transferred to the developer is development rights not land or building Section 50C of the Act stipulates as under: "Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both........" No authority is required to hold that terms 'land or building' 'or both' do not include development rights and that in the case before there was transfer of such rights only. In light of the above discussion and respectfully, following the judgment of the Hon'ble High Court in the case of Raj Ratan CHS(supra), we hold that FAA was not justified in taxing sum of Rs. 53.50 crores in the hands of the assessee, as same was the income of the members of the society. GOA. 2 is decided in favour of the assessee." 7. In the appeal before us, the Revenue is not even questioning the finding of the Tribunal that the facts in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
